REVENUE MEMORANDUM CIRCULAR NO.

4-2023 issued on January 10, 2023

clarifies the base amount for the imposition of the twenty percent (20%) penalty relative to the
early withdrawal of Personal Equity and Retirement Account (PERA) for assets, accounts and
sub-accounts classified as unqualified.
Pursuant to Section 10(C) of Revenue Regulations (RR) No. 17-2011, the early
withdrawal penalty, composed of the 20% of the gross income earned by the PERA for the
entire duration and the 5% tax credit availed, shall be imposed on any early withdrawal not
within the circumstances enumerated under Section 10 (B) of the aforesaid regulations. Any
loss incurred on PERA sub-accounts shall not be deducted from the gross income earned.
Under "unqualified early withdrawal", the withdrawal of a sub-account will result to
the automatic termination of all other sub-accounts. An illustration on the computation of Early
Withdrawal Penalty (EWP) and PERA proceeds upon termination of the account is provided
in the Circular.
For the purpose of the Regulation, it is reiterated that the PERA Administrator shall
be responsible for administering, overseeing and maintaining of accounts/sub-accounts of the
contributor's PERA; and shall compute and withhold the EWP from the proceeds due to the
contributor, consistent with the above provisions, for reporting and remittance to the BIR
pursuant to RR No. 2-2022 and Revenue Memorandum Circular No. 45-2022.